Joint Budget Committee warns of $700 million structural gap; agriculture, natural resources face cuts and cash‑fund transfers

The Joint Budget Committee told members of the Joint Agriculture and Natural Resources committee on Jan. 15 that the state is facing at least a roughly $700 million structural shortfall in its general fund and that both the Department of Agriculture and the Department of Natural Resources will be under pressure for operating cuts.

The shortfall, JBC members said, does not include $350 million approved by voters in Proposition 130 and reflects ongoing increases that have been masked in prior years by federal aid. Senator Kirk Meyer, speaking for the JBC staff briefing, summarized the problem as a structural gap that requires general‑fund operating reductions.

Why it matters: The JBC briefing framed how lawmakers will approach supplemental requests and the 2025‑26 budget. Department requests that annualize into ongoing spending — such as staffing additions or program continuations funded previously with one‑time or federal dollars — are at particular risk because the committee is seeking general‑fund operating cuts.

Most immediately, JBC staff highlighted department requests in the agriculture portfolio that include (in the report): a small increase for animal disease traceability support, ongoing funding for the soil‑health program, a long‑bill reorganization, and a state fair fund distribution change. JBC staff also identified a package of reduction ideas; Senator Kirk Meyer told the committee the governor’s Jan. 2 budget letter had accepted roughly $45–50 million of the staff‑proposed reductions.

The briefing also listed specific transfers and one‑time adjustments included in the governor’s January 2 letter. Those included a one‑time transfer of about $620,000 from the agricultural management cash fund to the general fund, a one‑time transfer of roughly $250,000 from the diseased livestock indemnity cash fund, and a transfer of a rodent control cash fund balance of $26,511 to the general fund. The committee was told these are part of the governor’s balancing measures, not JBC votes.

Details and context: The JBC staff presentation reviewed department long‑bill totals and FTE trends. The Agriculture Department’s total appropriation in the long bill was reported at about $76.7 million in total funds, of which roughly $21.8 million is general fund. Over the last six years, the department’s budget and FTE count have grown faster than statewide general‑fund appropriations, JBC materials showed. The JBC noted that some cash funds are continuously appropriated and not solely fee revenue.

Next steps: JBC staff said supplemental requests will start arriving and that the committee will move into figure setting in coming weeks; school finance and Medicaid true‑ups (with a hospital/Medicaid fiscal exposure JBC staff estimated at tens of millions) remain outstanding and affect the work. JBC members asked legislators to submit ideas for cuts and to engage with the JBC while the committee works toward a balanced budget.

Credits and sourcing: This article summarizes remarks during the Joint Budget Committee presentation to the Joint Agriculture and Natural Resources committee on Jan. 15, 2025.